6. Do You Pay
Capital Gains Tax on Gold Bullion?
Capital Gains Tax or CGT is a tax
on the gain or profit you make when you sell anything, give away or
otherwise dispose of something. It applies to assets that you own,
such as bullion, shares or property. There's a tax-free allowance and
some additional reliefs that may reduce your Capital Gains Tax bill.
Most bullion investors will never have to pay this tax due to the size
and value of their investment, however it is important that investors
know where they stand.
Capital Gains Tax
is only payable if an investor realises over £10,600 of profit in the
2012/13 financial year. Be mindful that the £10,600 limit is not the
total value of selling your bullion, but purely the profit made from
your original outlay. For example, if an investor brought some gold
bullion in 2009 for £30,000 and sold it in 2012 for £40,600, no
Capital Gains Tax would be due as only the £10,600 profit made is taken
into consideration. However, this single transaction would constitute
the investors full tax free allowance for the year and any other profit
made would be taxable at a rate between 18-28% - the rate you pay will
depend on your total taxable income. Gains above the basic rate limits
are charged at 28%. Please note the tax free limit of £10,600 is only
set for the financial year of 2012/13 and is reviewed every year. To
access the Capital Gains Tax section of the HMRC website at www.hmrc.gov.uk/cgt/
for more information. This does not apply to the sale of sovereigns
which are CGT free.
Please note it is the
responsibility of the individual investor and not that of the Gold
Dealer to declare any Capital Gains Tax payable. The gold dealers, along
with all other companies, are required to keep records of all
transactions made for 7 years, however they do not voluntarily forward
details on to the HMRC unless specifically requested.
Capital Gains Tax Exempt Bullion
Are there any CGT exempt bullion products? The simple answer to this
commonly asked question is yes. Capital Gains Tax is exempt on all
British legal currency. This includes gold Britannia coins in all sizes,
silver Britannia coins; gold Sovereigns in all sizes including Proof
sets, and the one pound gold coin, two pound gold coin and five pound
gold coin. Meaning, you can make an unlimited tax free profit on
investments of any size and value on all these British legal currency
bullion coins. CGT is payable on all other gold and silver coins which
do not fall into the category and all gold and silver bullion bars are
How to Avoid Paying Capital
Gains Tax on Gold?
Many investors choose to invest
in smaller unit gold coins or smaller gold bullion bars in order to pay
no CGT, or as little CGT as possible when selling their gold bullion.
This can be avoided or minimised by part selling bullion over more than
one financial year.
Buy CGT Free British Gold Coins
Despite British gold bullion coins attracting a slightly higher premium
than Krugerrands, most UK investors buy gold sovereigns and half
sovereigns for smaller units, and gold Britannia coins for larger 1 oz
units. Both British gold coins are Capital Gains Tax exempt and offer
the ultimate flexibility for investors.
wealthy gold investors in mind, anyone planning on spending a
substantial amount of money on gold should look no further than
sovereigns and the gold Britannia coin. To help highlight the potential
benefits of buying British gold coins, a gold investment of £50,000 in
September 2007 would be worth over £150,000 in November 2011. If this
gold investment was made in any way other than British gold coins the
gain would be liable to Capital Gains Tax. Therefore the tax saving to a
CGT paying person looking to realise this investment would be up to
£28,000. As the gold price continues to increase and the investor chose
to hold on to their gold the tax savings will be even greater.
If you have any
further questions regarding Capital Gains Tax please click the following link to visit the CGT section of the
HMRC website: http://www.hmrc.gov.uk/cgt/
If you have
any questions please feel free to contact our knowledgeable and friendly
sales team on 01253 675756 who will be happy to talk
your through any queries you may have. Alternatively, you can e-mail us
on: email@example.com and we will get back to you as soon